True Stimulus

Is it just me, or are the Congress and the President doing the usual two-step “we must be seen to be doing something about a recession because it is an election year” dance when it comes to “stimulus?” Think about it. As proposed, what would the stimulus really accomplish? We give individuals $600.00 ($1,200.00 to families or couples) to spend as they wish. It will cost approximately $150 Billion dollars. WHY?!?!? From what I have read, people are usually going to do one of two things with their checks, either pay off their credit cards (no new jobs) or go to Wal-Mart and spend it (most of the money going to China). If we are determined to put ourselves in debt that much more (and I personally don’t think we should) why don’t we address it differently?
If you want to truly stimulate the economy, do something that will help people long-term. This country is beginning to have major infrastructure problems. Why not propose it as a comprehensive Infrastructure Refurbishment Bill instead. Think of how many construction workers and American businesses would be hired with this amount of money? American Steel used to rebuild bridges. American families reaping the benefits of new jobs. All of the money would go into stimulus, and it would stay in the USA.
If you want relief for all Americans, then release 15% of the Strategic Petroleum Reserve over the course of a year to stabilize (reduce the price) of the oil markets. 15% is equal to 104 million barrels of oil (the current reserve level is at 697.5 million barrels). This would result in lower gasoline costs, lower heating oil costs, lower jet-fuel costs, etc. It would probably knock the price of oil back down into the $50-$60 range, which would translate to a savings of approximately $0.50 per gallon of gasoline for each consumer. Considering each family on average uses 15 gallons of gas a week (conservatively), this translates to a savings of nearly $400.00 per year per family, and jump starts the transportation industries (airlines, shipping, etc) by boosting their profits and allowing them to afford to create new jobs. It’s not like we’re draining the reserve, it will still be at a higher level than it was in 2001 (when it held 545 million barrels).

5 comments

  1. The Spider Slayer

    I think you are shortchanging the American people. How can Americans get out of debt if their income is going to taxes?
    What happens at the end of the year when the oil market prices go back up?
    Even if American families would save $400/year with lower gas prices, that still is far from the $1200 they stand to gain in May.
    In terms of infrastructure, that is an issue for the states. The people can vote in new infrastructure projects or the state legislatures can initiate them; this is not a project for the federal government.
    The USA is not presently in an economic position to require another New Deal. Individuals and families need to keep more of their own income.

  2. TooShort

    I think that the point was missed here. I don’t think we should be borrowing money as a nation and increasing the national debt just to give folks a check that will end up stimulating the Chinese economy. Think of it this way, if you have $5.00 in your checking account, a credit card bill of $5,000.00 and your spouse wants a new flat-screen tv, are you really going to let them buy it on said credit card? Why are we letting the government do that?
    The stated purpose of the stimulus package is to stimulate the economy and create jobs. How does every american going to Wal-Mart and buying new toys accomplish this? We’re not creating jobs, and the new toys are being manufactured overseas.
    As far as releasing oil goes, that’s an asset we already own. It would be the equivalent of taking money from your savings account rather than a cash advance on the credit card.